You may not remember our April 2008 cover story on Gary Gross, the Boca Raton, Florida, (where else?) broker with a 100-page, customer-complaint laden CRD. Gross apparently preyed on elderly people and a FINRA arbitration panel recently awarded $7 million to his victims, whom he defrauded.
The plaintiffs’ attorneys are calling the award one of the biggest FINRA awards ever against an individual broker.
Gross, an Orthodox Jew, used his temple and his faith to earn the trust of prospective clients, one of whom was a Holocaust survivor. His Form U-4, at more than 100 pages long, listed 35 customer complaints (33 of them settled) amassed at several firms over the previous 8 years and illustrated the problems regulators face taking bad brokers out of the industry. Among the SEC’s complaint filed against him in 2008: churning, misrepresentation and “fabricating customer account values,” among others. Registered Rep. detailed the story of how Gross and others like him with horrendous records are sometimes able to slip through the cracks for long periods of time in our April 2008 cover story, The Failure Chain.
The award, handed down on September 4, included $4 million in punitive damages against Gross, 56, based upon what the panel found to be “willful and wanton” conduct in “flagrant disregard” of the investors rights, according to Scott Silver, an attorney with Blum & Silver, one of the firms representing investors. The 61-page award said Gross created false and misleading statements while engaging in churning, unauthorized trading, unauthorized use of margin and many more violations that cost several investors their life savings.